Related Companies makes a ground-breaking strategic investment in Pocket
We are extremely excited to announce that we have attracted a new investor to Pocket. This week we became equity partners with Related Companies, the largest owner and developer of affordable housing in the US. This strategic investment in Pocket is a trail-blazing deal as it brings investment from across the pond into the UK’s affordable housing market. Related have acquired a 50% stake in Pocket, and will be working with us to scale up our delivery of discounted flats for sale and rent in London.
Related is one of America’s most prominent real estate firms
Related started out with a focus on affordable housing and since they began life in 1972, they have developed or acquired over 55,000 affordable homes in the U.S.. The business has a long history of partnering with innovative organisations committed to constructing or preserving affordable housing, so their strategic investment in Pocket is a great fit for us. We will be drawing on Related’s access to capital, scale and expertise in delivering affordable homes for rent and for sale over the coming years – these are exciting times for us.
Pocket’s previous boost came in September 2013 when the Greater London Authority (GLA) led by Mayor Boris Johnson agreed to provide us with a £21.7m equity loan over ten years, which has since been increased to £26.4m. We will continue to work closely with the GLA to deliver their ambitious affordable development programme – David Lunts, the GLA’s Executive Director Housing and Land, says of the Related deal: “We recognised some time ago what a valuable innovation Pocket’s product would be to London’s intermediate market and we are very pleased to see them attract such an experienced affordable housing provider from America to the Capital.”
2016 has been billed as “The Year of the First Time Buyer” with the launch of the Help to Buy ISA, London Help to Buy and Starter Homes.
Related’s investment coincides with the launch of a suite of initiatives by the Government to attract more first time buyers into the market. As Judith Evans of the FT points out, “Pocket’s model was one of the inspirations for the UK government’s discounted Starter Homes scheme, due to launch this year”. As demand for affordable homes in London skyrockets, Pocket has doubled its pipeline year-on-year since 2013 and we aim to complete 4,000 homes by 2023. The recent addition of London Help to Buy (an equity loan of up to 40% of the value of a home) will open up Pocket homes to those on even more moderate incomes.
Overall, this is good news for London’s first time buyers
Today’s investment shows that high-profile international businesses are beginning to look more closely at UK housing, and seeking strategic partnerships to help deliver on the GLA’s ambitions to provide a greater range of affordable housing in London. Pocket has challenged many in the housing sector to provide the kinds of low cost homes that so many Londoners want and need and with Related’s experience alongside us we hope that we can do more to help.
Stephen Ross, Chairman and Founder, Related Companies, said:
“I founded Related Companies in 1972 with a focus on developing, operating, and preserving Affordable Housing across the United States and it remains at the core of our diversified company today. Great cities must provide housing for the full range of its workforce and we believe Pocket provides a smart solution — well-designed, quality-built, affordable housing in the parts of London where its knowledge workers want to live and work. Marc Vlessing and Paul Harbard have created a great company and culture and we look forward to helping them grow.”
Last year, Related created a partnership with Argent, one of the UK’s leading mixed-use regeneration specialists, to create Argent Related. Argent have built a formidable reputation through their exceptional development of Kings Cross. We are already working with Argent at King’s Cross and worked with Argent Related on its successful bid to partner with the London borough of Barnet at Brent Cross South, so we anticipate collaborating together even more in the future now that we are strategically affiliated.
Kenneth Wong, Related Chief Operating Officer and Pocket Board Member, said:
“We have ambitious plans in London and Pocket is a perfect strategic fit with our ongoing initiatives. As a Related portfolio company, Pocket will now have a broader resource base, greater access to capital and our shared best practices. We look forward to enhancing Pocket’s pipeline and providing affordable housing solutions to governments, landowners, local communities and other developers.”
Pocket’s sales pipeline is becoming ever more active, with affordable homes now available at Western Road UB2, Ealing and the recently launched Wynne Road SW9, Lambeth with even more for sale later in 2016, in Hackney, Lambeth, Lewisham, and Camden.
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